Chinese government seeking to reduce economic growth in 2007 to 8 percent

5 March 2007

Beijing, China, 5 March – China wants to reduce the expansion of its economy this year to 8 percent, Prime Minister Wen Jiabao said Monday.

“Our most important task is promoting rapid and solid economic growth,” the Chinese premier told 2,890 delegates at the opening of the 5th session of the 10th National People’s Congress.

Wen added it is necessary to improve the quality and efficiency of China’s growth, underscoring that last year’s economic expansion was marred by significant inflation.

With the aim of supporting rural development, the central government’s expenditure on farming and rural areas rose by 42.2 billion yuan (US$ 5.3 billion) in 2006, more than 14 percent compared to 2005.

Taxes on agriculture and tariffs on farming produce were abolished.

Disposable per capita urban income rose by 11,759 yuan (US$ 1,469) and rural earnings increased 3,587 yuan (US$ 448) in 2006, 10.4 percent and 7.4 percent respectively, according to the economic report presented by Premier Wen.

Although China currently has the fourth-largest economy in the world, there are national concerns over energy use and the environment, with the country falling short of meeting targets to reduce energy consumption and control pollution, goals that were established by the Beijing Parliament in 2006.

According to Wen’s report to the National People’s Congress, the target of 8 percent growth will allow China to avoid major upsets, as this figure has been calculated on the basis of a range of factors.

The Beijing government wants to reduce urban unemployment to below 4.6 percent through the creation of 9 million new jobs, while simultaneously pegging inflation to under 3 percent.

Deputy Zhao Peng, chairman of the Commercial and Industrial Bank of China in the province of Anhui, described the 8 percent growth target as “reasonable”.

“Higher growth will lead to overheating of the economy and will not help to resolve social problems,” added Zhao.

A World Bank report published last month forecast that China’s economy would expand by 9.6 percent this year. (macauhub)